What Happens if You Report Fraud on Your Debit Card—Explained

If you fall victim to debit card fraud, reporting it immediately is wise, but what comes next? What happens if you report fraud on your debit card, and how can you prevent it in the future?

If you’re among the many victims of debit card fraud, it’s important to understand the fraud reporting process and all that follows it. This way, you can navigate your recovery process easily and be aware of your next steps. 

In this article, we’ll break down the steps of reporting debit card fraud and share tips to help you avoid future occurrences. 

How Does Debit Card Fraud Happen?

Fraudsters have several methods of conducting debit card fraud. Understanding how fraud occurs can prove useful in disputing your claim because banks may sometimes require this information during their investigation. 

These are a few ways fraudsters obtain your card information and use it for fraudulent activity:

• Card skimming—Fraudsters install card skimmers at point-of-sale terminals, such as ATMs, to steal your debit card information when you insert the card in the card reader. When the skimmer scans the card, it captures its information, which the fraudsters later use for their gain 
• Wi-Fi interception—Debit card fraudsters often lurk on public networks to intercept your card data when you transact with public Wi-Fi. These public networks are typically vulnerable and easier to breach, making it easy for bad actors to steal your data
• Card theft—Fraudsters steal physical debit cards and use the card information to engage in a host of other crimes. They could steal your identity by creating clone cards or opening new credit accounts in your name, piling up debt they never intend to pay. They could also use the information to breach your other financial accounts and steal from you
• Data breaches—If your debit card information becomes compromised in a data breach, it may fall into the wrong hands. Bad actors can trade your financial information on the dark web or use it for their gain 

What Happens When You Report Fraud on Your Debit Card? 

Here’s a step-by-step breakdown of what typically happens when you report fraudulent activity on your debit card:

1. Reporting the incident
2. Bank investigation begins
3. Temporary credit reimbursement
4. Investigation continues
5. Resolution and refund

Reporting the Incident

The process begins with you contacting your bank or credit union once you discover the fraudulent use of your debit card. Provide any relevant details that will be useful in moving the investigation along. 

Your bank will immediately cancel your card and issue you a new one, then begin an investigation into your claims.

Bank Investigation Begins

The fraud department in your bank will start an investigation to review the fraudulent activity. They do this by carefully examining your transactions and scrutinizing the disputed transactions to determine the validity of the claims. Be on the lookout for letters from your card issuer at various points of the investigation.

Temporary Credit Reimbursement

After you report fraud to your bank, it typically takes 10 business days to conduct an investigation. If the bank can’t complete the investigation within this time, you can request a temporary credit of the disputed funds until they can complete the investigation. 

Investigation Continues

Every bank has specific procedures for dealing with fraud cases, so timelines for the investigation vary. The complexities of your fraud case may also impact the investigation timeframe: 

• For most banks, the investigation takes approximately 10 business days
• Your bank must correct the erroneous withdrawal of funds from your account within one business day 
• Within three business days, they must notify you of the results of the investigation in writing
• You can complain to the Consumer Financial Protection Bureau if you are unhappy with the bank’s actions
• Within 15 days, the bank should respond to your complaint, but it may sometimes take up to 60 days

Resolution and Refund

If the bank confirms that the funds were deducted in a fraud, your bank will reverse the funds and credit your account. In some cases, your bank may require you to provide additional documentation, such as receipts, police reports, or written confirmation of the fraud, to support your claim. This is why it’s essential to maintain records of all fraudulent transactions or communications with your bank during the dispute.

When the case is completed, you’ll receive a final resolution letter from the issuer.

How Quickly Do You Need To Report a Stolen Debit Card To Get All Your Money Back?

If you suspect fraudulent activity on your debit card, you must report it immediately to reduce the amount you can potentially lose and to protect your funds from fraudsters. Here’s a table explaining how the reporting timeline affects the amount deducted from your potential reimbursement:

Note that if the money was deducted from your debit card remotely, with the physical card still in your possession, the timeline is slightly different. In this case, you have up to 60 days to report the unauthorized transactions before you are held liable.

Tips To Prevent Debit Card Fraud

To avoid falling victim to debit card fraud, there are protective measures you can put in place. They include the following: 

1. Activate online bank alerts—Many banks allow customers to set up alerts, such as emails, text messages, or mobile notifications, to notify them about suspicious activity on their accounts. Mobile notifications from your bank account are the safest of all three options since they’re tougher to spoof
2. Use a credit card instead—As opposed to credit cards, debit card fraud protection isn’t as consumer-oriented. Credit card issuers provide chargebacks for unauthorized charges, making it easy to recover your funds if they’re illegally withdrawn
3. Use a bank ATM instead of a public one—Bank ATMs offer more security than publicly located ATMs. There’s heavy surveillance and security on the premises, making it harder for fraudsters to install a card-skimming device and get away with it. For better protection, use the ATM inside the bank within business hours 
4. Keep your card safe online—If you must shop with your debit card online, be wary of unsecured websites that can be easily breached by fraudsters. Before inputting your card details on the site, check the URL to ensure it starts with “https,” not “http.” These sites are encrypted, making it difficult for hackers to steal your data

What To Do if Your Debit Card Number Is Stolen

If you see unrecognizable activity on your debit card account, it’s important to report it to the appropriate parties immediately. This will help mitigate the damages that may ensue and protect your funds from being carted away. 

Steps To Report Debit Card Fraud and Protect Your Funds

To report debit card fraud, take the following steps:

1. Contact your bank and ask them to monitor your account to prevent future fraudulent purchases. You can also request that they freeze your account while the investigation is ongoing
2. Report the debit card fraud to the Federal Trade Commission (FTC) if the fraudsters used the stolen card details to commit fraud. If sensitive personal information like your Social Security number (SSN) was compromised alongside your debit card, you will need to involve the major credit bureaus—Experian, TransUnion, and Equifax—to place a fraud alert on your account
3. File a police report if you lost your physical debit card. Visit the police fraud department where you believe the card was lost and make a statement. Make sure to bring your government-issued ID, proof of theft, and proof of address with you

Other Anti-Fraud Protection Tips To Follow

To keep your funds safe, take these steps:

1. Consider canceling your pre-approved payments on your debit card and sharing new card information with merchants. If you don’t have a new account, cancel all subscriptions associated with the old card
2. Consider moving your funds out of your regular savings accounts and into a safer, more secure storage solution. If fraudsters have access to your financial details, they can easily break into your accounts and steal more money.